When it rains, flows. Hopes for start-up funding as early as 2022 have been dampened by the pandemic, which has been exacerbated by instability in the wake of the collapse of global markets and the war in Ukraine.
CB Insights predicts a 20% drop in overall VC investments from Q1 to Q2, as ambitious young companies scramble to fight the dirt.
This failure is a particularly unpleasant setback for entrepreneurs hoping to advance climate-focused principles and social change. It is increasingly difficult for green companies to raise funds for large-scale innovation projects, mainly because most investors still associate “impact” with high risk.
More than ever, green startups now need to refine their strategies to raise VC money at scale, especially as they begin to evaluate their values from a financial perspective. As limited impact funds or value-based capital firms, funders support companies that have demonstrated the ability to scale.
Due diligence is not about checking boxes or filling out paperwork; It is about creating sustainable value for your portfolio company.
Here are five things green founders should keep in mind when looking for VC funding these days.
You can increase the amount when it is repeatable.
Remember the point at which you raised your first funding? They probably at least submitted a viable product and initial consumer research and got backed up for that.
But the investor climate has changed, and now your business should too. The next step isn’t about proving your concept or telling your inspiring founding story—it’s about growing your existing business, attracting new customers and customer segments, and entering new geographies.
All the while, you need to show potential investors why they should invest their much-needed money.